SHORT QUIZ 3

Transaction made by Clampz, a public accounting firm. For the month of august are shown below. Prepare a tabular analytics
which shows the effects of these transactions on the expanded accounting equation.
1. The company issued ordinary shares for € 30.000 cash
2. The company purchased €10.000 of office equipment on credit
3. The company received €10.000 cash in exchange for services performed
4. The company paid €800 for this month’s rent
5. The company paid a dividend of €700 in cash shareholders
Solution :

ACCOUNTING EQUATION

REFERENCE ASSET = LIABILITIES + EQUITY (REVENUE - EXPENSES - DIVIDEND)

1 Ordinary shares (cash) € 30,000 € 30,000
2 Equipment € 10,000 € 10,000
3 Service revenue by cash € 10,000 € 10,000
4 Rent Payment € (800) € (800)
5 Dividend payment by cash € (700) € (700)

= € 10,000 + € 38,500
TOTAL € 48,500 = € 48,500